Whitestone REIT Responds to MCB Indication of Interest
Whitestone REIT (NYSE: WSR) has unanimously rejected MCB Real Estate's $15 per share indication of interest, stating it undervalues the company based on Net Asset Value and Discounted Cash Flow analysis. The Board emphasized the company's strong performance, highlighting key metrics including: targeted 11% growth in 2024 Core FFO per share ($0.98-$1.04), increased Same Store NOI growth target of 3.75%-4.75%, improved Debt/EBITDAre ratio of 7.2x, and over 60% total shareholder returns since January 2022. The Board views the offer as opportunistically timed while the company gains momentum under new management.
Whitestone REIT (NYSE: WSR) ha rigorosamente respinto l'indicazione di interesse di MCB Real Estate di 15 dollari per azione, affermando che svaluta l'azienda sulla base dell'analisi del Valore Patrimoniale Netto e del Flusso di Cassa Scontato. Il Consiglio di Amministrazione ha sottolineato le solide performance dell'azienda, evidenziando metriche chiave tra cui: una crescita prevista del 11% per il Core FFO per azione nel 2024 ($0.98-$1.04), un incremento dell'obiettivo di crescita del NOI Same Store del 3.75%-4.75%, un miglioramento del rapporto Debito/EBITDAre di 7.2x e oltre il 60% di ritorni totali per gli azionisti da gennaio 2022. Il Consiglio considera l'offerta come opportunistica poiché l'azienda sta guadagnando slancio sotto la nuova gestione.
Whitestone REIT (NYSE: WSR) ha rechazado unánimemente la indicación de interés de MCB Real Estate de 15 dólares por acción, afirmando que subestima la compañía según el análisis del Valor Neto de Activos y el Flujo de Caja Descontado. La Junta destacó el sólido rendimiento de la empresa, resaltando métricas clave como: un crecimiento proyectado del 11% en el FFO Core por acción para 2024 ($0.98-$1.04), un aumento en el objetivo de crecimiento del NOI de Same Store de 3.75%-4.75%, una mejora en la relación Deuda/EBITDAre de 7.2x, y más del 60% de retorno total para los accionistas desde enero de 2022. La Junta considera que la oferta está cronometrada de manera oportunista mientras la empresa gana impulso bajo nueva dirección.
Whitestone REIT (NYSE: WSR)는 MCB Real Estate의 주당 15달러의 관심 제안을 만장일치로 거부했습니다. 회사가 순자산가치(Net Asset Value) 및 할인 현금 흐름(Discounted Cash Flow) 분석에 따라 저평가된다고 주장했습니다. 이사회는 회사의 강력한 실적을 강조하며, 다음과 같은 주요 지표를 부각시켰습니다: 2024년 핵심 FFO 주당 11% 성장 목표($0.98-$1.04), 동일 매장 NOI 성장 목표 3.75%-4.75% 증가, 7.2배의 개선된 부채/EBITDA 비율, 그리고 2022년 1월 이후 60% 이상의 총 주주 수익. 이사회는 새 경영진 하에 회사가 탄력을 얻고 있는 가운데, 이 제안이 기회주의적으로 적절한 시점이라고 판단하고 있습니다.
Whitestone REIT (NYSE: WSR) a rejeté à l'unanimité l'offre d'intérêt de MCB Real Estate de 15 dollars par action, affirmant qu'elle sous-évalue l'entreprise sur la base de l'analyse de la valeur nette d'actif et du flux de trésorerie actualisé. Le Conseil d'administration a souligné la solide performance de l'entreprise, en mettant en avant des indicateurs clés tels que : une croissance ciblée de 11 % du Core FFO par action pour 2024 (0,98 $ - 1,04 $), un objectif de croissance du NOI des magasins identiques augmenté de 3,75 % à 4,75 %, un ratio Dette/EBITDAre amélioré de 7,2x et plus de 60 % de retour total pour les actionnaires depuis janvier 2022. Le Conseil perçoit l'offre comme opportuniste, alors que l'entreprise prend de l'élan sous une nouvelle direction.
Whitestone REIT (NYSE: WSR) hat das Übernahmeangebot von MCB Real Estate von 15 US-Dollar pro Aktie einstimmig abgelehnt und erklärt, dass es das Unternehmen auf Basis der Nettovermögenswerte und der abgezinsten Cashflow-Analyse gering bewertet. Der Vorstand betonte die starke Leistung des Unternehmens und hob wichtige Kennzahlen hervor, darunter: ein angestrebtes Wachstum des Core FFO pro Aktie von 11% für 2024 (0,98 USD–1,04 USD), ein erhöhtes Wachstumsziel für den NOI der gleichen Filialen von 3,75%-4,75%, ein verbessertes Verhältnis von Schulden/EBITDAre von 7,2x und über 60% Gesamtrendite für die Aktionäre seit Januar 2022. Der Vorstand betrachtet das Angebot als opportunistisch, während das Unternehmen unter neuer Leitung an Schwung gewinnt.
- Targeting 11% growth in Core FFO per share for 2024
- Same Store NOI growth of 4.9% year-to-date
- Debt/EBITDAre ratio improved by 0.6x to 7.2x year-over-year
- Total shareholder returns exceeded 60% since January 2022
- Accretive asset recycling with favorable cap rate spreads
- Potential acquisition offer rejected, limiting immediate shareholder exit opportunity
Insights
This rejection of MCB's
- Strong operational momentum with projected
11% Core FFO growth in 2024 - Improved leverage metrics with Debt/EBITDAre at 7.2x, down 0.6x year-over-year
- Successful asset recycling strategy yielding over 100 basis points spread between disposition and acquisition cap rates
- Total shareholder return exceeding
60% since January 2022
The rejection indicates management's confidence in their standalone growth strategy and suggests they believe fair value is substantially above the offered price. The board's emphasis on NAV and DCF valuations over public market metrics implies they see significant embedded value not reflected in the current share price.
The operational metrics reveal a company executing well on its strategic initiatives. The Same Store NOI growth of
HOUSTON, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE: WSR) (“Whitestone” or the “Company”) provided the following response to MCB’s recent indication of interest:
P. David Bramble
MCB Real Estate
Baltimore, MD 21211
Dear Mr. Bramble,
The Whitestone Board of Trustees has reviewed your October 9, 2024, indication of interest. The Board’s review considered the
The Whitestone Board also considered the following in rejecting your indication of interest:
- The Whitestone REIT Board of Trustees believes the indication of interest is opportunistically timed to take advantage of Whitestone’s performance while the company is still gaining momentum under the new management team. Given the all cash indication of interest, Whitestone believes that a transaction at this valuation would deprive all other Whitestone shareholders of the opportunity to maximize the value of their investment while transferring additional value directly to MCB.
- Whitestone REIT is well-positioned for growth. As our financial results disclosed today demonstrate, Whitestone is making great progress against its strategic objectives and gaining momentum while driving shareholder value. Key highlights include:
- Reiteration of 2024’s Core FFO per share estimate of
$0.98 t o$1.04 , targeting11% growth in 2024 versus 2023 (at the midpoint) - An increased Same Store NOI growth target of
3.75% –4.75% , after delivering year-to-date Same Store NOI growth of4.9% - Q3 2024 Debt / EBITDAre ratio of 7.2x, a 0.6x improvement versus one year ago
- Accretive asset recycling with disposition cap rates over 100 basis points below acquisition cap rates while simultaneously positioning Whitestone for future growth
- Reiteration of 2024’s Core FFO per share estimate of
- Whitestone’s strong performance has driven total shareholder returns of over
60% since the current management team took over on January 18, 2022.
Source: S&P Capital IQ (Oct 25, 2024 Closing Price)
The Whitestone Board of Trustees continues to consider MCB an important shareholder and remains committed to acting in the best interests of all shareholders to maximize shareholder value.
Sincerely,
Whitestone Board of Trustees:
David T. Taylor
Nandita V. Berry
Julia B. Buthman
Amy S. Feng
David K. Holeman
Jeffrey A. Jones
Investor and Media Contacts:
David Mordy
Director of Investor Relations
Whitestone REIT
(713) 435-2219
ir@whitestonereit.com
About Whitestone REIT
Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio.
Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy. For additional information, please visit www.whitestonereit.com.
Forward-Looking Statements
This Report contains forward-looking statements within the meaning of the federal securities laws, including discussion and analysis of our financial condition and results of operations, statements related to our expectations regarding the performance of our business, and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry. Forward looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “potential,” “predicts,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or the negative of such terms and variations of these words and similar expressions, although not all forward-looking statements include these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
Factors that could cause actual results to differ materially from any forward-looking statements made in this Report include: the imposition of federal income taxes if we fail to qualify as a real estate investment trust (“REIT”) in any taxable year or forego an opportunity to ensure REIT status; uncertainties related to the national economy and the real estate industry, both in general and in our specific markets; legislative or regulatory changes, including changes to laws governing REITs; adverse economic or real estate developments or conditions in Texas or Arizona, Houston, Dallas, and Phoenix in particular, including the potential impact of public health emergencies, on our tenants’ ability to pay their rent, which could result in bad debt allowances or straight-line rent reserve adjustments; increases in interest rates, including as a result of inflation, which may increase our operating costs or general and administrative expenses; our current geographic concentration in the Houston, Dallas, and Phoenix metropolitan area markets makes us susceptible to potential local economic downturns; natural disasters, such as floods and hurricanes, which may increase as a result of climate change may adversely affect our returns and adversely impact our existing and prospective tenants; increasing focus by stakeholders on environmental, social, and governance matters; financial institution disruptions; availability and terms of capital and financing, both to fund our operations and to refinance our indebtedness as it matures; decreases in rental rates or increases in vacancy rates; harm to our reputation, ability to do business and results of operations as a result of improper conduct by our employees, agents or business partners; litigation risks; lease-up risks, including leasing risks arising from exclusivity and consent provisions in leases with significant tenants; our inability to renew tenant leases or obtain new tenant leases upon the expiration of existing leases; risks related to generative artificial intelligence tools and language models, along with the potential interpretations and conclusions they might make regarding our business and prospects, particularly concerning the spread of misinformation; our inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine, the conflict in the Gaza Strip and unrest in the Middle East; the need to fund tenant improvements or other capital expenditures out of our operating cash flow; and the risk that we are unable to raise capital for working capital, acquisitions or other uses on attractive terms or at all: the ultimate amount we will collect in connection with the redemption of our equity investment in Pillarstone Capital REIT Operating Partnership LP (“Pillarstone” or “Pillarstone OP.”); and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files with the Securities and Exchange Commission from time to time.
Non-GAAP Financial Measures
This release contains supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles (“GAAP”) including EBITDAre, FFO, NOI and net debt. Following are explanations and reconciliations of these metrics to their most comparable GAAP metric.
EBITDAre: The National Association of Real Estate Investment Trusts (“NAREIT”) defines EBITDAre as net income computed in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization and impairment write-downs of depreciable property and of investments in unconsolidated affiliates caused by a decrease in value of depreciable property in the affiliate, plus or minus losses and gains on the disposition of depreciable property, including losses/gains on change in control and adjustments to reflect the entity’s share of EBITDAre of the unconsolidated affiliates and consolidated affiliates with non-controlling interests. The Company calculates EBITDAre in a manner consistent with the NAREIT definition. Management believes that EBITDAre represents a supplemental non-GAAP performance measure that provides investors with a relevant basis for comparing REITs. There can be no assurance the EBITDAre as presented by the Company is comparable to similarly titled measures of other REITs. EBITDAre should not be considered as an alternative to net income or other measurements under GAAP as indicators of operating performance or to cash flows from operating, investing or financing activities as measures of liquidity. EBITDAre does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.
FFO: Funds From Operations: The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains or losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We calculate FFO in a manner consistent with the NAREIT definition and also include adjustments for our unconsolidated real estate partnership.
Core Funds from Operations (“Core FFO”) is a non-GAAP measure. From time to time, we report or provide guidance with respect to “Core FFO” which removes the impact of certain non-recurring and non-operating transactions or other items we do not consider to be representative of our core operating results including, without limitation, default interest on debt of real estate partnership, extinguishment of debt cost, gains or losses associated with litigation involving the Company that is not in the normal course of business, and proxy contest professional fees.
Management uses FFO and Core FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income (loss) alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Because real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that use historical cost accounting is insufficient by itself. In addition, securities analysts, investors and other interested parties use FFO and Core FFO as the primary metric for comparing the relative performance of equity REITs. FFO and Core FFO should not be considered as an alternative to net income or other measurements under GAAP, as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO and Core FFO do not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness. Although our calculation of FFO is consistent with that of NAREIT, there can be no assurance that FFO and Core FFO presented by us is comparable to similarly titled measures of other REITs.
NOI: Net Operating Income: Management believes that NOI is a useful measure of our property operating performance. We define NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Other REITs may use different methodologies for calculating NOI and, accordingly, our NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, depreciation and amortization, equity or deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of property from discontinued operations, management fee (net of related expenses) and gain or loss on sale or disposition of assets, and includes NOI of real estate partnership (pro rata) and net income attributable to noncontrolling interest, it provides a performance measure that, when compared year-over-year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. We use NOI to evaluate our operating performance since NOI allows us to evaluate the impact that factors such as occupancy levels, lease structure, lease rates and tenant base have on our results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about our property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of our overall financial performance since it does not reflect the level of capital expenditure and leasing costs necessary to maintain the operating performance of our properties, including general and administrative expenses, depreciation and amortization, equity or deficit in earnings of real estate partnership, interest expense, interest, dividend and other investment income, provision for income taxes, gain on sale of property from discontinued operations, management fee (net of related expenses) and gain or loss on sale or disposition of assets.
Same Store NOI: Management believes that Same Store NOI is a useful measure of the Company’s property operating performance because it includes only the properties that have been owned for the entire period being compared, and it is frequently used by the investment community. Same Store NOI assists in eliminating differences in NOI due to the acquisition or disposition of properties during the period being presented, providing a more consistent measure of the Company’s performance. The Company defines Same Store NOI as operating revenues (rental and other revenues, excluding straight-line rent adjustments, amortization of above/below market rents, and lease termination fees) less property and related expenses (property operation and maintenance and real estate taxes), Non-Same Store NOI, and NOI of our investment in Pillarstone OP (pro rata). We define “Non-Same Stores” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company's Same Store NOI may not be comparable to that of other REITs.
| Whitestone REIT and Subsidiaries | |||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||
| Initial & Revised Full Year Guidance for 2024 | |||||||||||||
| (in thousands, except per share and per unit data) | |||||||||||||
| Q3 Revised Range Full Year 2024 (1) | Projected Range Full Year 2024 | ||||||||||||
| Low | High | Low | High | ||||||||||
| FFO and Core FFO per diluted share and OP unit | |||||||||||||
| Net income attributable to Whitestone REIT | $ | 24,602 | $ | 27,602 | $ | 16,600 | $ | 19,600 | |||||
| Adjustments to reconcile to FFO | |||||||||||||
| Depreciation and amortization of real estate assets | 34,705 | 34,705 | 34,252 | 34,252 | |||||||||
| Depreciation and amortization of real estate assets of real estate partnership (pro rata) | 133 | 133 | 133 | 133 | |||||||||
| Gain on sale of properties | (10,212 | ) | (10,212 | ) | — | — | |||||||
| FFO | $ | 49,228 | $ | 52,228 | $ | 50,985 | 53,985 | ||||||
| Adjustments to reconcile to Core FFO | |||||||||||||
| Proxy contest costs | 1,757 | 1,757 | — | — | |||||||||
| Core FFO | $ | 50,985 | 53,985 | $ | 50,985 | $ | 53,985 | ||||||
| Denominator: | |||||||||||||
| Diluted shares | 51,262 | 51,262 | 51,262 | 51,262 | |||||||||
| OP Units | 695 | 695 | 695 | 695 | |||||||||
| Diluted share and OP Units | 51,957 | 51,957 | 51,957 | 51,957 | |||||||||
| Net income attributable to Whitestone REIT per diluted share | $ | 0.47 | $ | 0.53 | $ | 0.32 | $ | 0.38 | |||||
| FFO per diluted share and OP Unit | $ | 0.95 | $ | 1.01 | $ | 0.98 | $ | 1.04 | |||||
| Core FFO per diluted share and OP Unit | $ | 0.98 | $ | 1.04 | $ | 0.98 | $ | 1.04 | |||||
| (1) Includes a | |||||||||||||
| Whitestone REIT and Subsidiaries | ||||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||||||
| (continued) | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||
| PROPERTY NET OPERATING INCOME | ||||||||||||||||||||
| Net income attributable to Whitestone REIT | $ | 7,624 | $ | 2,486 | $ | 19,556 | $ | 17,639 | ||||||||||||
| General and administrative expenses | 4,878 | 5,392 | 17,610 | 15,651 | ||||||||||||||||
| Depreciation and amortization | 8,921 | 8,332 | 26,242 | 24,538 | ||||||||||||||||
| Deficit in earnings of real estate partnership (1) | — | 375 | 28 | 1,627 | ||||||||||||||||
| Interest expense | 8,506 | 8,400 | 25,813 | 24,563 | ||||||||||||||||
| Interest, dividend and other investment income | (3 | ) | (11 | ) | (15 | ) | (49 | ) | ||||||||||||
| Provision for income taxes | 118 | 95 | 327 | 339 | ||||||||||||||||
| Gain on sale of properties | (3,762 | ) | (5 | ) | (10,212 | ) | (9,626 | ) | ||||||||||||
| Management fee, net of related expenses | — | — | — | 16 | ||||||||||||||||
| Loss on disposal of assets, net | 111 | 480 | 183 | 500 | ||||||||||||||||
| NOI of real estate partnership (pro rata)(1) | — | 667 | 183 | 1,883 | ||||||||||||||||
| Net income attributable to noncontrolling interests | 99 | 35 | 257 | 248 | ||||||||||||||||
| NOI | $ | 26,492 | $ | 26,246 | $ | 79,972 | $ | 77,329 | ||||||||||||
| Non-Same Store NOI (2) | (1,330 | ) | (1,074 | ) | (5,389 | ) | (4,228 | ) | ||||||||||||
| NOI of real estate partnership (pro rata) (1) | — | (667 | ) | (183 | ) | (1,883 | ) | |||||||||||||
| NOI less Non-Same Store NOI and NOI of real estate partnership (pro rata) | 25,162 | 24,505 | 74,400 | 71,218 | ||||||||||||||||
| Same Store straight-line rent adjustments | (695 | ) | (833 | ) | (2,581 | ) | (2,390 | ) | ||||||||||||
| Same Store amortization of above/below market rents | (221 | ) | (214 | ) | (600 | ) | (607 | ) | ||||||||||||
| Same Store lease termination fees | (30 | ) | (300 | ) | (298 | ) | (600 | ) | ||||||||||||
| Same Store NOI (3) | $ | 24,216 | $ | 23,158 | $ | 70,921 | $ | 67,621 | ||||||||||||
| (1) We rely on reporting provided to us by our third-party partners for financial information regarding the Company's investment in Pillarstone OP. Because Pillarstone OP financial statements for the three and nine months ended September 30, 2024 and 2023 have not been made available to us, we have estimated deficit in earnings and pro rata share of NOI of real estate partnership based on the information available to us at the time of this Report. As of September 30, 2024, our ownership in Pillarstone OP no longer represents a majority interest. On January 25, 2024, we exercised our notice of redemption for substantially all of our investment in Pillarstone OP. | ||||||||||||||||||||
| (2) We define “Non-Same Store” as properties that have been acquired since the beginning of the period being compared and properties that have been sold, but not classified as discontinued operations. For purpose of comparing the three months ended September 30, 2024 to the three months ended September 30, 2023, Non- Same Store includes properties owned before July 1, 2023, and not sold before September 30, 2024, but not included in discontinued operations. For purposes of comparing the nine months ended September 30, 2024 to the nine months ended September 30, 2023, Non-Same Store includes properties acquired between January 1, 2023 and September 30, 2024 and properties sold between January 1, 2023 and September 30, 2024, but not included in discontinued operations. | ||||||||||||||||||||
| (3) We define “Same Store” as properties that have been owned during the entire period being compared. For purpose of comparing the three months ended September 30, 2024 to the three months ended September 30, 2023, Same Store includes properties owned before July 1, 2023 and not sold before September 30, 2024. For purposes of comparing the nine months ended September 30, 2024 to the nine months ended September 30, 2023, Same Store includes properties owned before January 1, 2023 and not sold before September 30, 2024. Straight line rent adjustments, above/below market rents, and lease termination fees are excluded. | ||||||||||||||||||||
| Whitestone REIT and Subsidiaries | ||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
| (continued) | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) | ||||||||||||||||
| Net income attributable to Whitestone REIT | $ | 7,624 | $ | 2,486 | $ | 19,556 | 17,639 | |||||||||
| Depreciation and amortization | 8,921 | 8,332 | 26,242 | 24,538 | ||||||||||||
| Interest expense | 8,506 | 8,400 | 25,813 | 24,563 | ||||||||||||
| Provision for income taxes | 118 | 95 | 327 | 339 | ||||||||||||
| Net income attributable to noncontrolling interests | 99 | 35 | 257 | 248 | ||||||||||||
| Deficit in earnings of real estate partnership (1) | — | 375 | 28 | 1,627 | ||||||||||||
| EBITDAre adjustments for real estate partnership (1) | — | 223 | 136 | 169 | ||||||||||||
| Gain on sale of properties | (3,762 | ) | (5 | ) | (10,212 | ) | (9,626 | ) | ||||||||
| Loss on disposal of assets | 111 | 480 | 183 | 500 | ||||||||||||
| EBITDAre | $ | 21,617 | $ | 20,421 | $ | 62,330 | 59,997 | |||||||||
| (1) We rely on reporting provided to us by our third-party partners for financial information regarding the Company's investment in Pillarstone OP. Because Pillarstone OP financial statements for the three and nine months ended September 30, 2024 and 2023 have not been made available to us, we have estimated deficit in earnings in Pillarstone OP no longer represents a majority interest. On January 25, 2024, we exercised our notice of redemption for substantially all of our investment in Pillarstone OP. | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||
| Debt/EBITDAre Ratio | ||||||||||||||||||||
| Outstanding debt, net of insurance financing | $ | 633,437 | $ | 632,353 | $ | 633,437 | $ | 632,353 | ||||||||||||
| Less: Cash | (2,534 | ) | (2,976 | ) | (2,534 | ) | (2,976 | ) | ||||||||||||
| Less: Deposit due to real estate partnership debt default | (13,633 | ) | — | (13,633 | ) | — | ||||||||||||||
| Add: Proportional share of net debt of unconsolidated real estate partnership (1) | — | 8,685 | — | 8,685 | ||||||||||||||||
| Total Net Debt | $ | 617,270 | $ | 638,062 | $ | 617,270 | $ | 638,062 | ||||||||||||
| EBITDAre | $ | 21,617 | $ | 20,421 | $ | 62,330 | $ | 59,997 | ||||||||||||
| Effect of partial period acquisitions and dispositions | $ | (172 | ) | $ | — | $ | (1,004 | ) | $ | — | ||||||||||
| Pro forma EBITDAre | $ | 21,445 | $ | 20,421 | $ | 61,326 | $ | 59,997 | ||||||||||||
| Annualized pro forma EBITDAre | $ | 85,780 | $ | 81,684 | $ | 81,768 | $ | 79,996 | ||||||||||||
| Ratio of debt to pro forma EBITDAre | 7.2 | 7.8 | 7.5 | 8.0 | ||||||||||||||||
| (1) We rely on reporting provided to us by our third-party partners for financial information regarding the Company's investment in Pillarstone OP. Because Pillarstone OP financial statements as of September 30, 2023 have not been made available to us, we have estimated proportional share of net debt based on the information available to us at the time of this Report | ||||||||||||||||||||
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/60363def-9013-4ae3-8f6d-5da763e12eea
FAQ
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